WASHINGTON/JERUSALEM March 12 (Reuters) - Mizrahi Tefahot Bank Ltd, Israel's third-largest bank, admitted to helping clients evade U.S. taxes and agreed to pay $195 million, the U.S. Justice Department said on Tuesday, culminating a five-year investigation. The bank engaged in schemes to hide clients' funds so they could avoid paying U.S. income taxes between 2002 and 2012, the Justice Department said. In a quarterly earnings report in August, the bank said it had set aside 425 million shekels ($117.75 million) during the quarter to cover a likely fine by U.S. authorities.

Israeli computer vision firm EyeSight said on Tuesday it raised $15 million in a funding round led by Hong Kong-based Jebsen Capital, Arie Capital and Mizrahi-Tefahot Bank, bringing its total raised to date to $50 million. EyeSight said its artificial intelligence computer vision system monitors a driver's gaze direction, pupil dilation, eye openness and head position and uses algorithms to detect levels of drowsiness and distraction. EyeSight will also scan the entire cabin of a car, understanding who and what is in the vehicle.

Mizrahi-Tefahot, Israel's third-largest bank, reported a 48 percent drop in quarterly net profit on Thursday, as it hiked a provision to cover the potential settlement of a U.S. tax evasion investigation. Mizrahi said it earned 207 million shekels ($57 million) in the second quarter, compared with 400 million shekels a year earlier, and 390 million shekels forecast in a Reuters poll of analysts. It said it set aside 425 million shekels, or $116.5 million, in the quarter to cover a likely fine by U.S. authorities.

Mizrahi-Tefahot Bank, Israel's third-largest bank, said on Wednesday it would not accept a proposal from the U.S. Department of Justice to pay a fine of $342 million to settle a U.S. tax evasion investigation. The bank said it believed that any "reasonable calculation" based on the behaviour of its employees as described by the Justice Department would result in a much smaller fine. It said a letter from the Justice Department did not include any details or calculations on which it based its offer.

Moody's Investors Service ("Moody's") has today assigned Counterparty Risk Ratings (CRR) to Bank Hapoalim B.M, Bank Leumi, First International Bank of Israel, Israel Discount Bank and Mizrahi Tefahot Bank. Moody's CRR are opinions of the ability of entities to honor the uncollateralized portion of non-debt counterparty financial liabilities (CRR liabilities) and also reflect the expected financial losses in the event such liabilities are not honored.